The amount of money earned per person in a country or region is referred to as per capita income. Per capita income may be used to calculate an area’s average per-person income and to assess the population’s level of living and quality of life. A country’s per capita income is computed by dividing its national income by its population. Per capita income may also be used to determine whether or not a location is affordable. It may be used with statistics on real estate prices to estimate if average homes are out of reach for the average family, for example. Businesses might also consider per capita income when deciding whether or not to build a business in a certain town or region. In comparison to a town with a low per capita income, a firm with a high per capita income may have a higher chance of making revenue from selling its items.
Per Capita Income or Average Income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year.
It is calculated by dividing the area’s Total Income(Gross Income) by its total population.
For example if the Total Income of a region for the year 2016 was $75000, and the total population(young, old, men, women or any gender all above the ground) of that region in 2016 was 35,000 people.
Then the Per Capita Income of that Region =$75000/35000 =$2.143 approx.